Download AquaFund - Water Reduction and Cost Savings

Cabinet Member for Finance and Resources
Ref. FR32(11/12)
AquaFund - Water Reduction and Cost Savings
Key Decision:
Yes
Part I
Report by Executive Director Finance and Electoral
Performance and Head of Capital and Asset Divisions:
Management
N/A
Executive Summary
The County Council’s Energy and Water Management Project (EWMP) is a Capital
and Asset Management Unit (CAMU) project dedicated to reducing carbon dioxide
emissions across both the Council’s corporate and school estate through improved
energy and water savings.
As a result of increasing utility costs and a drive for efficiency savings the EWMP
project team has identified an opportunity for water bill savings across the estate
which requires no upfront capital investment from the Council.
The AquaFund shared saving scheme provides a 100% grant to cover the cost of
water saving equipment and a bill validation and tariff analysis service. The
Council receives 50% of savings and the other 50% is returned to AquaFund to be
reinvested in other projects.
It is estimated that the Council can save 20% of its current corporate estate water
consumption by signing up to the scheme which over the 5-year contract period is
expected to deliver £160,000 worth of savings. 100% of savings will be received
by the Council after this period. Schools can also choose to sign up to the
AquaFund which could deliver savings of approximately £550,000 over the contract
period.
In addition 1% of all AquaFund’s revenue goes directly to the charity Water Aid
and can be used for publicity purposes and contribute to the Council’s Corporate
Social Responsibility (CSR) requirements.
Recommendations
The Cabinet Member is recommended to approve that the County Council sign up
to the AquaFund shared saving scheme contract detailed in paragraph 2. in order
to reduce water consumption across the corporate estate.
1.
Background:
1.1
The new Sustainability Strategy and the Energy and Water Management
Project (EWMP) 2010 – 2013 set annual energy and water consumption
reduction targets across the corporate and school estate.
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1.2
The County Council’s Energy and Water Management Project (EWMP) is a
Capital and Asset Management Unit (CAMU) project dedicated to reducing
carbon dioxide emissions across the Council’s estate buildings.
1.3
To date the EWMP has mainly focused on the delivery of savings through
improved energy efficiency; driven by the Government’s CRC Energy
Efficiency Scheme and the Salix fund criteria which both exclude water
efficiency projects.
1.4
An opportunity for delivering annual water savings has been identified, which
will result in significant financial savings for the County Council, improve the
quality of water data currently held and will help meet carbon reduction
targets. All this can be achieved without the need for any capital investment
from the Council.
2.
The AquaFund Scheme
2.1
The AquaFund is a shared saving scheme operated through Advanced
Demand Side Management (ADSM) which is a commercial organisation
specialising in assisting organisations in the private and public sectors to
reduce energy and water consumption, delivering significant financial savings
and helping to meet environmental targets. They will provide the County
Council with a 100% grant along with resources and expertise to reduce
water consumption. The Council receive 50% of savings and the other 50%
is returned to AquaFund.
2.2
As well as delivering savings through reduced consumption AquaFund will
also address the issue of the County Council’s poor quality water
consumption data.
2.3
The AquaFund scheme will:
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2.4
Provide a dedicated Water Bureau Service which will validate and verify
all bills and site data,
Consolidate billing data and site data for all accounts,
Survey all sites, providing technical, financial, operational and
environmental evaluations including calculation of the estates water
footprint,
Install and maintain relevant water efficiency technologies including
Automated Meter Reading (AMR) where cost effective,
Provide the administrative resource to optimise water tariffs with water
suppliers and negotiate refunds,
Provide monthly online reports for in-depth analysis and visibility on
water usage including investigating any anomalies and leak detection,
Maintain water consumption reductions – guaranteeing savings,
Provide a dedicated Water Account Manager and 24 hour help desk.
As part of the AquaFund scheme historical bills will be verified and validated
and a water consumption baseline will be agreed with the County Council
from which accurate saving targets can be calculated.
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2.5
The savings resulting from the scheme, based on the agreed baseline, will be
shared equally between the County Council and AquaFund for 5 years after
which all the savings go to the Council.
2.6
After the 5-year contract period all the AquaFund installed technologies (e.g.
rain water harvesters, AMR, occupancy sensors, cistern and tap flow
restrictors) will be signed over to the County Council at no additional charge.
It is difficult to project the lifetime of the equipment without having identified
what is required but water saving equipment can expect to have a 20 year
life.
2.7
As part of the AquaFund agreement all equipment installed will be
maintained by ADSM who deliver the AquaFund scheme, for the 5-year
contract period. After this period there will be an option to extend the
maintenance and Bureau Service provided by ADSM at an additional charge.
This additional charge is estimated to be 20-25% of the ongoing savings.
3.
AquaFund and the WSCC Estate
3.1
The AquaFund has a successful track record for reducing water consumption
in other local authorities such as Watford Borough Council (29% year-onyear savings) and Teignbridge District Council (20% savings within the first
6-months).
Currently no other organisations or schemes have been
identified which offer this level of service for whole estate water efficiency
projects.
3.2
The business case for the installation of AMR water meters has previously
been assessed but not progressed owing to the upfront capital cost. Only an
agreement, commensurate with this proposal, including both AMR and a
physical measure would allow savings to be realised by the County Council.
3.3
The terms and conditions of the AquaFund have been approved by Legal
Services and are in line with the County Council’s procurement policy.
3.4
The Energy and Water Management Project (EWMP) Board approved the
AquaFund scheme as a cost effective option for delivering savings across the
estate.
3.5
The Council’s water savings achievements across the corporate sites can be
used to demonstrate the success of the AquaFund scheme and can then be
presented as a possible option for water savings in West Sussex schools as a
whole estate or as individual sites.
4.
Projected savings
4.1
Following a meeting with AquaFund, based on their experience of working
with similar local authority estates, they are confident savings of around 20%
could be achieved across the County Council’s estate. A more accurate
savings figure will be calculated once the agreement has been signed and
site visits and billing analysis has been carried out and this will possibly
identify even greater savings.
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4.2
The following tables present the projected water consumption and cost
savings that can be expected from signing up to the scheme. Table 1 shows
2010/11 water consumption and cost figures (based on billing data held by
the County Council) for the corporate and school estate. Table 2 shows
projected cost savings across the estate if a 20% reduction was achieved
against 2010/11 figures. Table 3 shows the shared savings between the
County Council and AquaFund over the 5-year contract period.
Table 1 –WSCC estate water consumption and cost 2010/11 baseline
WSCC Estate
Corporate
School
Total
Consumption (M3)
123,564
535,643
659,207
Cost (£)
318,492
1,111,455
1,429,947
Table 2 - WSCC estate annual water consumption and cost savings assuming 20 %
reduction against 2010/11 baseline
WSCC Estate
Corporate
School
Total
Consumption saving (M3)
24,713
107,129
131,842
Cost saving (£)
63,698
222,291
285,989
Table 3 – Projected shared savings over 5-year contract period based on 20%
reduction on 2010/11 water consumption baseline
WSCC Estate
Corporate
School
Total
Consumption
savings over 5-years
(M3)
123,565
535,645
659,210
WSCC/School
savings over 5-years
(£)
159,245
555,727.5
714,972.5
Savings repaid
to AquaFund
159,245
555,727.5
714,972.5
4.3
AquaFund will also help the Council meet its Corporate Social Responsibility
(CSR) objectives as 1% of AquaFund’s revenue goes to the charity Water
Aid, enabling some of the world’s poorest people in developing countries to
gain access to safe water and sanitation. The County Council’s contribution
to Water Aid will be allocated to a specific project e.g. safe drinking water in
a specific village which will help the County Council’s promotion of the
scheme’s benefits.
5.
Conclusion
5.1
The Council is currently focusing its efforts on delivering carbon savings
across the built estate through investment in energy efficiency measure
because this delivers greater carbon savings than water efficiency projects.
5.2
Although water efficiency only delivers modest carbon savings it does result
in significant financial savings on water bills. This and the requirement to
meet water reduction targets as part of the Corporate Sustainability
Programme and EWMP are drivers for taking action.
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5.3
The AquaFund scheme has been identified as a proven, cost effective option
for delivering water savings across both the corporate and, if approved
following consultation with schools, the school estate.
6.
Consultation
6.1
The EWMP Project Board has been consulted at all stages of project
identification and feasibility. Officers from CAMU and Financial Services are
represented on the Board including the Head of Capital and Asset
Management who also emailed relevant Cabinet Members with information
on the project. The Legal Services Head of Procurement, Property and
Environment was also consulted and a revised AquaFund legal agreement
has been approved by legal services.
6.2
A draft of this paper was also circulated to representatives in legal services
and financial services for comments and the paper has been revised in line
with their comments.
7.
Equality - Customer Focus Appraisal
No positive or negative impacts have been identified in terms of equality and
non-discrimination therefore there is no CFA report attached.
8.
Resource Implications and Value for Money
8.1
The AquaFund shared saving scheme offers value for money as the Council is
not required to make any upfront capital investment. The cost of the Water
Bureau Service and water saving equipment is covered by AquaFund in
return for 50% of the cost savings achieved.
8.2
In order for the Council to accurately calculate the amount of capital required
to invest in water saving equipment and ongoing maintenance a costly whole
estate survey would need to be undertaken. In addition to this the bill
validation process and any subsequent negotiations needed with water
companies would require a large amount of Council officer time and resource.
8.3
Maintenance costs and the Bureau Service are covered by the AquaFund
scheme for the contract period after which these costs would need to be met
as part of the Council’s existing property maintenance programme or
alternatively the Council can sign up to an extended maintenance contract
with ADSM at a cost of approximately 20-25% of the savings.
9.
Risk Management Implications
9.1
There is a risk that projected water savings will not be realised due to the
water efficiency equipment not performing effectively. This risk will be
managed with regular equipment checks and maintenance.
9.2
Changes in onsite water usage may have an impact on water consumption
and this will be monitored to ensure that any noticeable increases in water
consumption are identified and action is taken to mitigate this.
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9.3
The AquaFund is a shared saving scheme and as such ADSM will want to
reduce any risks over the 5 year contract period that could result in savings
not being met.
10.
Crime and Disorder Act Implications
Not applicable
11.
Human Rights Act Implications
Not applicable
Rich Hornby
Executive Director
Finance and Performance
Colin James
Head of Capital and Asset
Management
Contact: Nicola Winser, 01243 752397
Background Papers
WSCC Sustainability Strategy: Building a sustainable future
WSCC Energy and Water Management Project (EWMP) Strategy
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